The fact is that these frequent crossovers do not appear all the time.
You will only have great problems with them if you trade a timeframe less than 20 minutes.
[B]If, for example, you trade a 1 minute timeframe, you will even find the spreads wrecking your profits!![/B]
Try it on demo and you will see what I mean.
[B]So there is our first clue - do not trade a timeframe below 20 minutes.[/B]
As to the stop loss, we do not set one in these cases.
There are enough complications with the losses here without introducing a stop loss.
In fact the stop loss in this case just makes things more complex without reducing your losses.
[B]So in the case of frequent crossovers, the opposing crossover is your stop loss.[/B]
You will accumulate some losses in pips this way (in the above case we lose 72 pips in a 20 minute timeframe).
We soon make up for these losses with one good trade!!
[B]Well, what do we do if there is no new opposing crossover coming? [/B]
In that case, you are not going to make a loss are you!!?
As long as the blue MMACD line stays above the zero line and does not cross back, you are in profit.
After a long time the MMACD line will cross back (not a frequent crossover)but then you will have a substancial profit.
So in the case of infrequent crossovers, you can set a PCI stop loss of, say 3 or 4 candles behind your price action.
For those not familiar with my PCI stop loss - it means power, computer, internet.
That is, a stop loss to protect against power failure, computer failure, or internet failure.
[B]For the rest, your final profit/loss is determined after the blue line does an exit cross.[/B]
I have to stop posting now - I will answer all questions after the hot day tomorrow.
This thread has already become a very valuable resource for trend trading and will definitely be around for a very long time. Looking forward to future posts and then eventually encorporating the ideas found in this thread into my trading.
Well this thread is a good one, adressing the one problem with the ultimate method, entering in the middle of a trend, or something similar, i guess:D!
But should one read this thread with the ultimate method in mind, or not!:eek:
or maybe just for now?
I guess you can see the combination one instinctively tries to make, just to maximise the profits! I just think a combination would be a real killer! One shouldnt get greedy though, mish mashing, im happy with the ultimate method but reading this thread closely!
My english sucks at the moment, i hope all readers understand what im trying to say here! Damn its to flippin cold :mad:!!!
Tymen it already looks like things are coming together quite nicely!
I do have one question:
If we’re trading without the stops are we leaving ourselves with a possible increase of risk? I guess where I’m leading with this is for those that can’t actively check on a trade for the signal line in the MMACD to cross above/below zero, how can one reduce risk? Or does trading the higher timeframes allow for enough time for checks and adequate exits?
Gmma you can make yourself, all the information is in post #199.
Tymen has not posted his MMACD indicator yet. We know that the two periods in the MACD indicator will be replaced by the averages of the two sets of gmma. But once he posts the code for GFT it will be easy to make a similar indicator for mt4.
[QUOTE=tymen1;173071]The 2nd matter is one of the trade being very inefficient.
This will become a major problem as we go on and, therefore, I am going to devote a whole topic to improving the trade efficiency!!
Hey Tymen,
Welcome back from your vacation, also, sorry to read of your accident. I hope you heal quickly. Thank you for another great teaching thread.
I hope it is ok to post a chart with some thoughts. I know you will be teaching the proper methods soon and apologize if it is not appropriate yet.
I’ve been studing Ken Lee’s Price action thread and thought I could apply some of those principles for improving trade efficiency here. I overlaid the indicators from this thread with 10sma, 50sma, 62ema, 200sma.
Some of what I see is…stay in the trade while the candles are closing the same side of the 10ma, once candles, start closing on the opposite side, time to think about closing out or taking partial profit or reverse your position. Same at the other ma’s. I added some thoughts to my chart.
Thanks
Jack
Use a PCI stop loss set at approx 3/4 candles behind the price action.
Then if something goes wrong, you can phone your broker and close the trade until you are up and running again.
While you are making the phone call, the PCI will protect you in the meantime.
If the trade reverses, that is the MMACD goes back to the zero line early, you will end up with a loss.
[B](close your PCI since it was not activated).[/B]
In that case you can either close the trade or reverse it (long to short/short to long).
You might yet get another reversal with another loss.
[B]But the quick turn arounds of the MMACD do stop happening.[/B]
Then you get one really good trade and it kills all the losses with a big profit!!
[/B]
